Property Firms Embrace Smaller Chinese Cities – Bloomberg News

From International Herald Tribune:

Property prices in Shanghai , Beijing and Guangzhou are too high and developers should focus on the smaller Chinese cities as they grow richer, some real estate executives believe.

“First-tier cities are getting too expensive,” Justin Chiu, executive director at Cheung Kong , Hong Kong’s biggest developer, said in an interview Tuesday. “Anywhere in the world people who support the property market are from the middle class, but in these first-tier cities, prices are getting too high for middle class people to absorb.”

Hong Kong developers like Cheung Kong and Henderson Land Development are relying on returns from investments in China. The average housing price in 70 major cities there grew 6.4 percent from a year earlier in May, the fastest pace in 18 months, according to the National Development and Reform Commission. [Full Text]

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